Landlord work refers to improvements or construction that the landlord agrees to complete and manage directly as part of a lease agreement, as opposed to providing a cash tenant improvement allowance for the tenant to manage their own buildout. This structure shifts construction management responsibility to the landlord, who typically has established contractor relationships for the specific building.
Landlord work vs cash TI allowance
| Factor | Landlord work | Cash TI allowance |
|---|---|---|
| Construction management | Landlord manages directly | Tenant manages own contractor |
| Design control | More limited tenant input | Full tenant control within budget |
| Cost overrun risk | Typically landlord's responsibility | Typically tenant's responsibility |
What to watch for before committing
Detailed scope of work documentation
Get a highly detailed, written scope of work specifying exactly what the landlord will build, including materials and finish quality.
Timeline commitments
Negotiate a firm completion timeline with penalty provisions if the landlord's work is delayed.
Design input and approval rights
Clarify what input you have on design decisions, even though the landlord is managing construction.
Change order process
Understand the process and cost implications if you want changes to the agreed scope during construction.
Quality control and inspection rights
Negotiate the right to inspect work in progress and require corrections if it doesn't meet the agreed specification.
Punch list and completion sign-off
Establish a clear punch list and sign-off process before accepting the space as complete.
When you need to know this
- Negotiating a new lease with buildout needs — choosing between landlord-managed work and a cash TI allowance
- Wanting reduced construction management burden — letting the landlord's established contractor relationships handle the work
- Ensuring building-standard finishes — benefiting from the landlord's familiarity with the specific building's systems
- Evaluating buildout timeline risk — understanding who bears responsibility for delays under a landlord work structure
Frequently asked questions
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